After surging for five months, retail inflation may\u00a0 moderate at 5 percent, PTI cites a report by Morgan Stanley. However, the report says widening fiscal deficit targets pose bigger threat than inflation. "Moderate risks to macro stability are emerging on account of the wider-than-targeted fiscal deficits", says Morgan Stanley. The foreign brokerage is of the view that the major risks to the Indian economy come from rising headline inflation, widening trade deficit and fiscal deficit targets.It also expects the trade deficit to show improvement in the month of January. The government will release consumer price inflation (CPI) data for January today. The retail inflation was printed at 5.2 percent in December. The brokerage says that the attention will be on the inflation and trade deficit prints against this backdrop.Morgan Stanley expects the headline CPI inflation to moderate to 5 percent year-on-year in January. The report also adds that backed by the seasonal dip in vegetable prices, the food inflation will also moderate on a year-on-year basis to 4.5 percent from 5 percent in December. The trade deficit will also improve to $12 billion in January from $14.9 billion previously in wake of strong demand. The exports will continue to grow at double digits for consecutively for the third month supported by favorable base effects and strong global demand. The brokerage expects exports to grow at 16.8 percent in January compared to 12.5 percent in December. It also noted that import growth is likely to have remained robust, growing at 19.2 percent from 21.5 percent in the previous month. Non-oil, non-gold imports is likely to be expected to have stayed strong at 24.6 percent against 12.8 percent as domestic demand indicators such as car and two-wheeler sales growth was strong in the month, the Morgan Stanley report said. Last week, Reserve Bank of India (RBI) maintained status quo in terms of key policy rates and retained \u2018neutral\u2019 stance. The RBI has also flagged concerns related to inflation, and higher MSP announced in the budget.